Annual consumption growth in the Middle East averaged 4.3%/yr
in 2004- 07, rising
from around 500,000
tons to almost 600,000 tons, according data presented at the seminar
by Ian Padley, Hercules’ global
market segment manager
tissue & towel. But, while consumption
showed a healthy
volume growth, production increased at 6.6%/yr and capacity at
10.8%/yr in the period, pushing operating rates down from 88%
at the beginning of the period to just 78% last year.
Growth in all three areas is now slowing but the picture is far
from rosy. Consumption is expected to rise by 3.9%/yr through
2011, but growth in production and capacity are forecast to be
around double that level. Operating rates are expected to stay
at low levels (78%). By 2011, capacity will be at close to 1.2
million tons, more or less double regional consumption.
The drivers for the rapid capacity growth have been the readilyavailable
funds for investment, the perception that demand will explode
with rapid city growth, and that export markets will readily soak
up demand, Padley said. But he also cautioned against accepting
the published statistics as absolute truth.
Euromonitor’s Irina Barbalova drew attention to the growing
wealth of many Middle East countries. While the average GDP per
capita for the Middle East and Africa (MEA) is just over $4000,
she said, much of the region has incomes many times higher. Qatar
is the leader at around $45,000 per person per year, but UAE,
Kuwait and Saudi Arabia are all increasingly wealthy, while Tunisia,
Iran, Algeria, Morocco and Egypt are well above the regional average.
One of the uncertainties facing producers and consumers alike
today is the cost of energy. The only sure thing is that prices
have risen dramatically, with a knock-on effect across all sectors.
Hercules’ regional business manager Europe functional & process
Julie Allison noted how rising oil prices drive up the cost of
other raw materials used in the production of chemicals for papermaking,
from bonefat or soya to ethylene, methanol or acrylonitrile (which
has risen from around $400 to almost $2000 since 1999).
Allison noted that there are many opportunities for mills to reduce
their costs by careful planning and organisation. On the tissue
machine, breaks, unscheduled cleaning, colour changes and so on
all carry a heavy cost. Most of them can be reduced with the help
of the appropriate chemicals, leading to cost savings. As shown
in Table 1, these savings can be significant.
Padley reinforced the message on cost rises in a presentation
on technical developments. Hercules’ most basic chemicals
are derived from mineral hydrocarbons, he said. “Oil at
over $100/barrel hurts us all. Pressure on plant-derived hydrocarbon,
a major raw material for tissue, is even worse due to bio-ethanol.”
Hercules responds to these pressures by innovating, adding value
and aiming to be the preferred supplier to market leaders, he
added. “To grow, we must move into adjacent markets to our
traditional wet-end and crepe chemistry.” In particular,
in the emerging markets, he said, Hercules is seeking to offer
global solutions including training, support and service, as well
as the basic chemicals.
The company spends about 2% of sales on R&D and this is resulting
in a range of innovations
of interest to tissue makers. This year, the company plans to
introduce new yankee dryer troubleshooting software. A high-efficiency
extended mineral oil release, and second-generation absorbency
aids. In 2009, novel strength additives will permit the use of
up to 90% hardwood furnish, new dust control additives will be
introduced for tissue machines and converting, there will be a
stepchange improvement in yankee coating for high-performance
machines, and the existing range of absorbency aids will have
their performance enhanced.
One of the issues facing tissue producers in the Middle East and
elsewhere is the cost and quality of raw material.
Pulp prices have risen and, while the forecast is for more stable
prices in the near term, there could be shortages of long fibre
for some time to come. In the three years 2008-2010 nearly 4 million
tons net of new hardwood market pulp capacity is expected (nearly
all in Latin America and south-east Asia), while for softwood
the corresponding figure is around 1 million tons, according to
figures presented at the seminar.
Cost pressures and environmental concerns have seen recycling
rates rise sharply in recent years. An unfortunate consequence
of this is that the quality of fibre is falling and at best variable.
Ramesh Patel, general manager of UK-based Stephenson Recycling
Chemicals, noted that an efficient response to this variability
is to physically mix and randomise recovered paper feed to the
pulper to ensure optimum consistency.
One LWC mill has
spent $1.5 million on a system to do this, he said. The benefits
include improved performance, higher yield, lower use of chemicals
and a reduction in the variations in the final deinked pulp.
Patel analysed the
trends in use of chemicals in deinking, noting above all the trends
to neutral chemistry and enzyme deinking. Benefits of moving to
neutral include reduced cost of chemistry, improved water clarification
and better runnability, he said.
Metso, which co-organised the seminar, contributed a number of
papers, including
information on their
paper machines, service for tissue mills and yankee maintenance
(see Marketissues article in this issue for a modified version
of a paper presented at the conference). Tissue World has reported
on many of these developments on an ongoing basis. TW
